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Matador (MTDR) Q4 Earnings Beat on Higher Oil & Gas Output
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Matador Resources Company (MTDR - Free Report) reported fourth-quarter 2020 adjusted earnings of 27 cents per share, beating the Zacks Consensus Estimate of 12 cents. The bottom line, however, declined from the year-ago earnings of 39 cents per share.
Revenues of $224.2 million declined from the year-ago level of $288.7 million. Moreover, the metric missed the Zacks Consensus Estimate of $233 million.
The better-than-expected quarterly earnings were supported by higher oil and gas production volumes, as well as decreased lease operating costs. This was partially offset by weak oil price realizations.
Matador Resources Company Price, Consensus and EPS Surprise
Fourth-quarter 2020 total production volume averaged 7,653 thousand barrels of oil equivalent (MBoe) (comprising 57.7% oil), higher than 6,785 MBoe a year ago.
The average production volume of oil was 48,028 barrels per day (Bbls/d), up from 42,087 Bbls/d in fourth-quarter 2019. Natural gas production was 210.9 million cubic feet per day (MMcf/d), up from 190 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $40.99 per barrel, down from $56.36 in the year-ago quarter. However, natural gas price of $2.97 per thousand cubic feet was higher than $2.31 in the prior-year quarter.
Operating Expenses
The company’s production taxes, transportation and processing costs decreased to $3.53 per Boe from $3.88 in the year-ago quarter. Also, lease operating costs fell from $4.43 per Boe in fourth-quarter 2019 to $3.20. However, plant and other midstream services’ operating expenses increased to $1.62 per Boe from the year-earlier figure of $1.51.
Total operating expenses per Boe were recorded at $22.24, lower than the year-ago level of $27.88.
Balance Sheet
As of Dec 31, 2020, Matador had cash and restricted cash of $91.4 million. Long-term debt was recorded at $1,815 million, which included $440 million of borrowings under its credit agreement. The debt to capitalization was 54.5%.
Capital Spending
For drilling, completing and equipping wells during the fourth quarter, the company spent $63 million, which is 21% lower than what it had projected. Enhanced operational efficiencies, along with reduction in drilling and completion costs in the Delaware Basin primarily aided its performance.
Proved Reserves
Total proved oil and gas reserves of Matador grew 7% year over year through 2020 to 270.3 million Boe, marking an all-time high level. Of the total amount, 59.2% was oil. In addition, 97% was from the Delaware Basin. Eagle Ford (2%) and Haynesville (1%) comprise the rest of reserves. Matador’s production increased 13.6% year over year to 75,175 (Boe/d) through 2020, of which 57.9% was oil.
Guidance
It expects 2021 oil equivalent production in the range of 29.9-31 million barrels, indicating an increase from 27.5 million Boe in 2020. Total oil production guidance is expected in the range of 17.2-17.8 million barrels, indicating an increase from the 2020 level of 15.9 million barrels.
The company’s 2021 capital spending guidance for drilling, completing and equipping wells is projected in the range of $525-$575 million, suggesting a jump of 22% from $450 million a year ago. In midstream, it expects to spend $20-$30 million, signaling a plunge from $89 million in 2020.
Importantly, production taxes, transportation and processing costs for 2021 are expected in the range of $4.25-$4.75 per Boe, indicating a rise from the 2020 level of $3.39. Lease operating expenses are expected in the range of $3.50-$4 per Boe. The metric was $3.81 in 2020. Total operating expenses for 2021 are estimated within $23.50-$27 per Boe. The same in the prior year was $24.13.
Berry’ bottom-line estimates for 2021 have witnessed three upward revisions and no downward movement in the past 60 days.
ConocoPhillips’ sales for 2021 are expected to increase 54% year over year.
Altus Midstream’s bottom line for 2021 is expected to increase 380.5% year over year.
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Matador (MTDR) Q4 Earnings Beat on Higher Oil & Gas Output
Matador Resources Company (MTDR - Free Report) reported fourth-quarter 2020 adjusted earnings of 27 cents per share, beating the Zacks Consensus Estimate of 12 cents. The bottom line, however, declined from the year-ago earnings of 39 cents per share.
Revenues of $224.2 million declined from the year-ago level of $288.7 million. Moreover, the metric missed the Zacks Consensus Estimate of $233 million.
The better-than-expected quarterly earnings were supported by higher oil and gas production volumes, as well as decreased lease operating costs. This was partially offset by weak oil price realizations.
Matador Resources Company Price, Consensus and EPS Surprise
Matador Resources Company price-consensus-eps-surprise-chart | Matador Resources Company Quote
Production
Fourth-quarter 2020 total production volume averaged 7,653 thousand barrels of oil equivalent (MBoe) (comprising 57.7% oil), higher than 6,785 MBoe a year ago.
The average production volume of oil was 48,028 barrels per day (Bbls/d), up from 42,087 Bbls/d in fourth-quarter 2019. Natural gas production was 210.9 million cubic feet per day (MMcf/d), up from 190 MMcf/d a year ago.
Price Realization
Average realized price for oil (excluding realized derivatives) was $40.99 per barrel, down from $56.36 in the year-ago quarter. However, natural gas price of $2.97 per thousand cubic feet was higher than $2.31 in the prior-year quarter.
Operating Expenses
The company’s production taxes, transportation and processing costs decreased to $3.53 per Boe from $3.88 in the year-ago quarter. Also, lease operating costs fell from $4.43 per Boe in fourth-quarter 2019 to $3.20. However, plant and other midstream services’ operating expenses increased to $1.62 per Boe from the year-earlier figure of $1.51.
Total operating expenses per Boe were recorded at $22.24, lower than the year-ago level of $27.88.
Balance Sheet
As of Dec 31, 2020, Matador had cash and restricted cash of $91.4 million. Long-term debt was recorded at $1,815 million, which included $440 million of borrowings under its credit agreement. The debt to capitalization was 54.5%.
Capital Spending
For drilling, completing and equipping wells during the fourth quarter, the company spent $63 million, which is 21% lower than what it had projected. Enhanced operational efficiencies, along with reduction in drilling and completion costs in the Delaware Basin primarily aided its performance.
Proved Reserves
Total proved oil and gas reserves of Matador grew 7% year over year through 2020 to 270.3 million Boe, marking an all-time high level. Of the total amount, 59.2% was oil. In addition, 97% was from the Delaware Basin. Eagle Ford (2%) and Haynesville (1%) comprise the rest of reserves. Matador’s production increased 13.6% year over year to 75,175 (Boe/d) through 2020, of which 57.9% was oil.
Guidance
It expects 2021 oil equivalent production in the range of 29.9-31 million barrels, indicating an increase from 27.5 million Boe in 2020. Total oil production guidance is expected in the range of 17.2-17.8 million barrels, indicating an increase from the 2020 level of 15.9 million barrels.
The company’s 2021 capital spending guidance for drilling, completing and equipping wells is projected in the range of $525-$575 million, suggesting a jump of 22% from $450 million a year ago. In midstream, it expects to spend $20-$30 million, signaling a plunge from $89 million in 2020.
Importantly, production taxes, transportation and processing costs for 2021 are expected in the range of $4.25-$4.75 per Boe, indicating a rise from the 2020 level of $3.39. Lease operating expenses are expected in the range of $3.50-$4 per Boe. The metric was $3.81 in 2020. Total operating expenses for 2021 are estimated within $23.50-$27 per Boe. The same in the prior year was $24.13.
Zacks Rank & Other Key Picks
The company currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked players in the energy space include Berry Corporation (BRY - Free Report) , ConocoPhillips (COP - Free Report) and Altus Midstream Company (ALTM - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Berry’ bottom-line estimates for 2021 have witnessed three upward revisions and no downward movement in the past 60 days.
ConocoPhillips’ sales for 2021 are expected to increase 54% year over year.
Altus Midstream’s bottom line for 2021 is expected to increase 380.5% year over year.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.
Click here for the 4 trades >>